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TMI Blog2014 (11) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... rt Licence and the importers expressed their inability to produce the required specific Import Licence, the imported goods were confiscated under Section 111 of the Customs Act, 1962. Further, on the basis of contemporaneous imports, it was observed that the declared value of US $ 3.5 per kg i.e. Rs. 153.30 per kg and total Rs. 6,80,652/- (CIF) for the 4400 kgs used/defective Tungsten Carbide Tips was on the lower side as compared to the value of identical goods imported at Nhava Sheva Customs House. Accordingly, Show Cause Notice dated 17-4-2000 was issued and the importers were called upon to Show Cause and explain as to why the used/defective Tungsten Carbide Tips should not be confiscated under Section 111(d) and (m) of the Customs Act, 1962 read with Section 11(5) of the FTDR Act, 1992 and also as to why penalty should not be imposed under Section 112(a) of the Customs Act, 1962 read with Section 11(2) of the FTDR Act, 1992 for having imported the used/defective Tungsten Carbide Tips without a specific Import Licence and for having declared a lower value. The importers were also called upon to explain as to why the declared lower value of imported goods should not be enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the FTDR Act, 1992. However, taking into consideration the facts and circumstances of the case, I give an option to redeem the goods on payment of a fine of Rs. 1,86,480/- i.e. Rs. 42/- per kg. I also impose a penalty of Rs. 15,000/- on the importer under Section 112(a) of the Customs Act, 1962 read with Section 11(2) of the FTDR Act, 1992. These will be in addition to the duty leviable thereon on the enhanced value of Rs. 210/- per kg (CIF)." Aggrieved by the order passed by the Joint Commissioner vide Order-in-Original No. 08/2000, dated 24-4-2000, the importer appealed to the Commissioner of Customs (Appeals), Airport, Mumbai who vide Order-in-Appeal No. 53/2001 AP Lic (Goa), dated 16-11-2001, taking a lenient view, passed an order reducing redemption fine to Rs. 42,000/- and penalty on the importer to Rs. 4,700/- on the grounds that the appellants are actual users and were registered as a SSI Unit. Further against the Order-in-Appeal No. 53/2001, dated 16-11-2001, the importer filed an appeal in CESTAT vide Appeal No. C/217/2001-Mum, dated 27-12-2001 on the following grounds : 1. The adjudicating Authority and the Appellate Authority fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have accepted the value declared by the Appellants, where it is supported by Bank attested Invoice; 10. The Adjudicating Authority and the Appellate Authority was wrong and incorrect in holding that Specific Licence is required for the import of the used/defective rusted serviceable/unserviceable Tungsten Carbide Tips; 11. The Adjudicating Authority and the Appellate Authority did not appreciate that the impugned goods are not of consumer nature, but the same were used for cutting the metals in the factory; 12. The Adjudicating Authority and the Appellate Authority was wrong in enhancing the value on the basis of the some other import which has taken place long back at Mumbai and Nava Sheva, because old, used and defective Tungsten Carbide Tips cannot be taken as identical, because they differ with each other in many respects, thus, the loading of the value on the basis of the same was absolutely unjustified, unwarranted and illegal, and some is bad in law, which caused great injustice to the Appellants; 13. The Adjudicating Authority and the Appellate Authority did not consider t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd imposition of such heavy and harsh fine and penalty causes grave injustice and harm to the Appellants, and the same deserves to be quashed and set aside; 22. The Appellants submit that though the Commissioner of Customs (Appeals) agreed with the contention of the Appellant that the import of similar goods referred to by the Adjudicating Authority for enhancing the value is not a contemporaneous one in time, quantity and quality, he has enhanced the value. He should have accepted the transactional value in terms of several decisions of the Tribunal, High Courts and Apex Court; 23. The Appellate Authority has failed to consider the Order and the Appeal preferred by the Appellant which go contradictory to each other; 24. The Authorities have failed to appreciate that the Appellant's appeal and the Department's Appeal ought to have been heard together and order passed; 25. The Appellate Authority ought to have appreciated the liberalized policy of the Government and ought to have confirmed the Order-in-Original permitting the Appellant to redeem the goods under confiscating on redempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r pass any other such order as may deem fit? The Hon'ble CESTAT upheld the order of the Commissioner (Appeals) in the case of the Importer's appeal and passed order vide Order No. A/1549/WZB/2004/CI, dated 29-9-2004 as follows : ".......The appellants do not dispute that the goods were used/defective; hence their clearance was permissible only against a specific import licence, which was admittedly not produced. Further, since the value of the goods was loaded on the basis of contemporaneous imports of similar used/defective goods, the enhancement of value of the imported goods is to be sustained. Confiscation is sustainable for violation of the provision of ITC Policy, as also penalty. We, therefore, see no reason to interfere with the impugned order and upheld the same and rejected the appeal." The above order of CESTAT was accepted by the Commissioner of Customs and no further appeal was filed against the order. Further in the case of Department's appeal, Hon'ble CESTAT, vide Order No. A-466/2008/CSTB/C-II, dated 6-8-2008 passed on Order as follows : ".... We find that both the lower authorities have not gone into the details of the case as regards the correct margin of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority has taken 20% of Rs. 210/- i.e. Rs. 42/- per kg as redemption fine which works out to Rs. 1,86,400/-. A penalty of Rs. 15,000/- was also imposed by the original adjudicating authority. The quantity of goods imported vide Bill of Entry No. 322717, dated 11-10-1999 was 10,398 kgs while in the instant case it was 4400 kgs. Generally, the contemporary price should be for the goods of almost the similar quantity and description. It is also understood that higher the quantity of goods of a given description, lower the prices. In this case, the import compared was of 10,398 kgs as against 4400 per kgs in the instant case. Therefore, the value of the goods enhanced @ Rs. 210/- per kgs was reasonable. The Commissioner (Appeals) in his order dated 16-11-2001 has also accepted this value but reduced the fine and penalty. Though the reasoning for imposing redemption of fine @ Rs. 42/- per kg has not been given by the original adjudicating authority, it clearly indicates that the redemption fine has been worked out @ 20% taking it as margin of profit on the enhanced value. The importers have submitted that the Department has not taken cognizance of CESTAT order A/1549/WZB/2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower value of imported goods should not be enhanced on the basis of contemporaneous imports at other ports from Rs. 153.30 per kg to Rs. 210/- per kg (CIF) and the total value of the impugned goods needs to be enhanced from Rs. 6,80,652/- (CIF) to Rs. 9,32,400/- (CIF) in terms of Rule 5 of the Customs Valuation Rules, 1988. 4. The matter was adjudicated by Joint Commissioner, who vide Order-in-Original No. 8/2000, dated 24-4-2000 ordered the following : "The goods in question, 4400 kgs, old and used Tungsten Carbide Tips valued at Rs. 9,32,400/- are hereby ordered to be confiscated under Section 111(d) and (m) of the Customs Act, 1962 read with Section 11(5) of the FTDR Act, 1992. However, taking into consideration the facts and circumstances of the case, I give an option to redeem the goods on payment of a fine of Rs. 1,86,400/- i.e. Rs. 42/- per kg. I also impose a penalty of Rs. 15,000/- on the importer under Section 112(a) of the Customs Act, 1962 read with Section 11(2) of the FTDR Act, 1992. These will be in addition to the duty leviable thereon on the enhanced value of Rs. 210/- per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being heard was given to the importer. 9. The importer, vide letter dated 11-10-2010, forwarded a copy of CESTAT order A/1549/WZB/2004-CI, dated 29-9-2004 stating that as the Hon'ble CESTAT has upheld the order of Commissioner (Appeals), and since no Appeal or review has been filed by the Department against the CESTAT order, the CESTAT order had become final. They further requested to drop all proceedings and case be dismissed. 10. However, the new adjudicating fixed a Personal Hearing on 1-3-2012. Shri H.S. Oberoi & Shri B. Singh appeared on behalf of the importer for personal hearing and stated that the order dated 29-9-2004 of the Hon'ble CESTAT had not been brought on the record before Hon'ble CESTAT, when Department filed their case before CESTAT, which was in their favour. Now while adjudicating the instant de novo under consideration, he requested to look into the matter afresh before deciding the matter. 11. The Adjudicating Authority went through the case and the oral submissions as well as written submission produced by the importer at the time of Personal Hearing and vide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and penalty as directed by Hon'ble CESTAT in its Order dated 6-8-2008. In view of the foregoing, it is prayed as follows : (a) The Order-in-Original No. 2/2011-12 ADC, dated 26-3-2012 passed by the Additional Commissioner of Customs, Panaji, Goa in respect of M/s. Saidutta Enterprises, Shop No. 397/1, Ejipura Main Road, Vivekanand P.O., Bangalore 47 does not appear to be legal, correct and proper in view of the aforesaid grounds and therefore may be set aside. (b) The Commissioner (Appeals) may pass any such order as may be deemed fit in the facts and circumstances of the case." 2. Respondent contends that : "1. At the very outset this appeal is bad in law because it is seeking your honour to supercede the order of the Hon'ble CESTAT Order No. A/1549/WZB/2004, dated 29-9-2004. Furthermore as per their own contention the above CESTAT Order has been accepted by Commissioner of Customs, Marmagoa. Hence this appeal is without merit and bad in law and should be dismissed immediately as it is seeking that your honour pass a judgment when there alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove narration of facts, the assessee and the Department filed appeals before the Hon'ble CESTAT against the order of the Commissioner (Appeals). Though, apparently, both sides were aware of each other's appeal, no effort was made to enlighten the Jt. CDR office, CESTAT Registry nor the Hon'ble Bench itself. Resultantly, Hon'ble CESTAT happened to pass two different verdicts on the same issue. Both sides were aware of this error, yet neither side attempted to file a Rectification Petition nor approached a higher judicial forum to rectify the defect. Worse, the Adjudicating officer, also despite being aware of the incongruity, chose to adopt an unprofessional approach by simply ignoring one verdict of the Hon'ble CESTAT. Such an order was non-existent before his eyes! The matter does not end here. To make matters worse, the order of the Adjudicator is taken up for Review and these Authorities also turn a blind eye to the two conflicting decisions of the Hon'ble CESTAT and have simply preferred this present appeal. That is why the respondent is questioning : "We submit, we reiterate all the earlier contentions and emphasize that the Commissioner of Customs, Marmagoa has a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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